Why is counterfeiting illegal?
Good question!
Answer: Because it causes inflation.
What is inflation?
Answer: An increase in the money supply.
What difference is there between a 'criminal' element printing money and the 'Government' element printing money?
Answer: No difference.
If you have one widget worth one dollar and the government doubles the money supply the widget now becomes worth two dollars. It's the same widget. The widget did not change. Rather the dollar became worth less. In fact, each dollar is now worth less. In fact worth only $0.50.
So, as the government 'element' continues to print more and more paper money, the value of the paper money becomes worth less and less. Soon it will become worthless.
Houses do not increase in value. The dollar decreases in value which means it takes more paper dollars to purchase what used to cost less.
This is a paradigm switch in thinking. Everyone believes that homes increase in value, in reality, they remain the same and the money decreases in value. This is false thinking.
If one thinks of it in reverse, it becomes clear what paper 'money' really is. It's a medium of exchange that keeps devaluing over time.
It wasn't always this way. Back when the U.S. used money backed by gold and silver it had worth. A 'savings account' at the bank actually was a worthwhile endeavor. Today's inflation makes a 'savings account' a losing proposition. The bank pays less than the rate of inflation which causes the money saved to lose value over time.
This is the reason that the Founding Fathers put Article I, Section 10 in the Constitution which states:
"No State Shall Make Any Thing But Gold And Silver Coin A Payment In Tender Of Debt."
They were wise. They were historians. They knew that 'fiat' money would always go to its intrinsic value of zero. They lived through it in England and the New World Colonies. They did not want that to happen in the U.S.
You cannot inflate gold or silver coins. You can shave the edges, but that is why there are ridges on the sides of coins to prevent that. Coins are denominated in ounces. A one ounce gold coin should always weigh 1 oz. Over time coins wear and become lighter, but there isn't another coin created out of the wear, as would happen when coins were shaved. The shavings were melted and another coin was created.
Back when money was gold and silver, banks used to issue 'script'. Script is a piece of paper indicating that the gold, or silver, was deposited in the bank. Like checks, people started using script as a form of money. The Script was 'Certified'. "Certified Funds" means that the money (silver and gold) is on deposit in the bank that issued it.
Over time, the Federal Reserve (a non government private bank) changed the wording on our money from 'Certified' to 'Note'. A "Note" is a sign of debt that means there is nothing backing the money. There is no 'wealth' backing a 'Note', just 'good faith' that it will be paid. It's an I.O.U.
Now, think about inflation and the government borrowing more notes from the non Federal Reserve at an ever increasing rate with interest. The government is borrowing 'debt' not 'wealth'. With every 'loan' of paper from the Fed, the paper 'value' becomes worth less and less.
This is why, in 1913, a loaf of bread sold for 5c and today it sells for $2.50. Why a house sold for $4000 that today sells for $400,000. Inflation. Wages do not keep up with inflation. So, over time, our nation becomes more in debt and poorer as a people.
Counterfeiting causes inflation no matter who does it.
Good question!
Answer: Because it causes inflation.
What is inflation?
Answer: An increase in the money supply.
What difference is there between a 'criminal' element printing money and the 'Government' element printing money?
Answer: No difference.
If you have one widget worth one dollar and the government doubles the money supply the widget now becomes worth two dollars. It's the same widget. The widget did not change. Rather the dollar became worth less. In fact, each dollar is now worth less. In fact worth only $0.50.
So, as the government 'element' continues to print more and more paper money, the value of the paper money becomes worth less and less. Soon it will become worthless.
Houses do not increase in value. The dollar decreases in value which means it takes more paper dollars to purchase what used to cost less.
This is a paradigm switch in thinking. Everyone believes that homes increase in value, in reality, they remain the same and the money decreases in value. This is false thinking.
If one thinks of it in reverse, it becomes clear what paper 'money' really is. It's a medium of exchange that keeps devaluing over time.
It wasn't always this way. Back when the U.S. used money backed by gold and silver it had worth. A 'savings account' at the bank actually was a worthwhile endeavor. Today's inflation makes a 'savings account' a losing proposition. The bank pays less than the rate of inflation which causes the money saved to lose value over time.
This is the reason that the Founding Fathers put Article I, Section 10 in the Constitution which states:
"No State Shall Make Any Thing But Gold And Silver Coin A Payment In Tender Of Debt."
They were wise. They were historians. They knew that 'fiat' money would always go to its intrinsic value of zero. They lived through it in England and the New World Colonies. They did not want that to happen in the U.S.
You cannot inflate gold or silver coins. You can shave the edges, but that is why there are ridges on the sides of coins to prevent that. Coins are denominated in ounces. A one ounce gold coin should always weigh 1 oz. Over time coins wear and become lighter, but there isn't another coin created out of the wear, as would happen when coins were shaved. The shavings were melted and another coin was created.
Back when money was gold and silver, banks used to issue 'script'. Script is a piece of paper indicating that the gold, or silver, was deposited in the bank. Like checks, people started using script as a form of money. The Script was 'Certified'. "Certified Funds" means that the money (silver and gold) is on deposit in the bank that issued it.
Over time, the Federal Reserve (a non government private bank) changed the wording on our money from 'Certified' to 'Note'. A "Note" is a sign of debt that means there is nothing backing the money. There is no 'wealth' backing a 'Note', just 'good faith' that it will be paid. It's an I.O.U.
Now, think about inflation and the government borrowing more notes from the non Federal Reserve at an ever increasing rate with interest. The government is borrowing 'debt' not 'wealth'. With every 'loan' of paper from the Fed, the paper 'value' becomes worth less and less.
This is why, in 1913, a loaf of bread sold for 5c and today it sells for $2.50. Why a house sold for $4000 that today sells for $400,000. Inflation. Wages do not keep up with inflation. So, over time, our nation becomes more in debt and poorer as a people.
Counterfeiting causes inflation no matter who does it.
